In recent years, the trend of offering financial products as part of employee benefits has gained popularity among employers. This has led to the emergence of many startups in the fintech sector to assist in this endeavor.
Kashable, a leading fintech company, has recently received attention from venture capitalists for its innovative approach to providing credit and financial wellness products as a voluntary benefit through employers. The company has secured $25.6 million in Series B funding, with Revolution Ventures and Moneta Ventures co-leading the round, joined by EJF Capital and Krillion Ventures. Overall, Kashable has raised a total of $45 million in equity capital and over $175 million in debt capital.
One of the key focus areas for many of the startups in this sector is financial wellness. Over the past three years, several companies such as Payroll Integrations, Minu, HoneyBee, Addition Wealth, and Origin have raised venture capital with their unique approaches to incorporating financial wellness into employee benefits.
However, Kashable sets itself apart from the rest by not only offering access to free financial education tools, but also providing employment-based loans. Co-founders and co-CEOs Einat Steklov and Rishi Kumar say that when the company was founded in 2013, financial wellness was still a relatively new concept. They spent a considerable amount of time educating employers about the value of such financing options.
However, the global pandemic highlighted the lack of financial stability among many Americans, as millions lost their jobs. Kumar confirms that this crisis emphasized the need for financial wellness, especially as studies showed that most Americans did not have enough savings to cover even a single paycheck.
As a solution to this problem, Kashable offers companies the opportunity to provide their employees with loans averaging $4,000. The company integrates with a company’s payroll systems and utilizes this data to power its fully automated underwriting process, offering affordable credit to its employees. Their algorithm takes into account various factors such as employment status, individual income stability, and more. The loans are then automatically repaid through payroll deductions.
In addition to loans, Kashable also offers financial education resources, including credit monitoring, individual financial coaching, and budgeting tools. These services are free, and employers have complete control over which resources their employees can access.
Steklov notes that customers who have borrowed from Kashable have seen a marked improvement in their credit score. They can also track their progress on a monthly basis, with two-thirds of borrowers experiencing an average increase of 40 to 50 points. This improvement can potentially move a person from the subprime category to a near-prime category, making them eligible for loans and mortgages.
Since its inception in 2013, Kashable has provided over 300,000 loans to employees of 250 employers, including well-known names such as Cigna, Reid Health, Huntington Ingalls, Alight Solutions, and Chobani. The company has experienced an impressive 50% annual revenue growth over the past few years and has generated $300 million in loan volume annually.
The co-founders plan to use the new capital to expand their services, offer more credit to employees, introduce additional financial wellness resources, and hire more staff. They intend to grow their research and development team to enhance their suite of financial products and underwriting model.
Revolution Ventures’ managing partner, David Golden, and Moneta Ventures’ co-founder and managing partner, Meirav Har Noy, will join Kashable’s board of directors as part of the investment. Golden praises the company’s customer acquisition strategy through employers and their unique underwriting model, which utilizes real-time employment data and access to bi-weekly payrolls.
In conclusion, Kashable is on a mission to provide innovative financial products and services to improve the financial wellness of employees across the country. With the support of venture capitalists, the company is determined to make a positive impact in this growing sector, providing opportunities for individuals to build a more secure financial future.
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